Employees are everything to your business. You could have a fantastic product or provide a unique service, but if your employees aren’t performing, it undermines all the work you’ve put into your business. The importance of employee performance is hard to understate; great employees improve your business, while poorly performing employees could leave you and your customers frustrated.

How Positive Employee Performance Helps

The unstated role of employees in an organization is that they represent your business and brand. Regardless of their specific job title, each interaction they have with current or potential clients reflects on you. Engaged, competent employees will offer your clients a good experience that reflects well on your brand. Great employees lead to repeat customers, and that’s what every business wants.


Your business's culture contributes to employee performance. Look for ways to improve your culture and support your employees.

Employee performance also impacts company culture. If your employees are engaged, punctual, managed fairly and willing to take responsibility, that creates a culture of respect and trust. That leads to employees staying with your business longer, which lowers expensive employee turnover.

Another aspect of the importance of employees in an organization is how they think of your business when they're not at work. For example, if your employee thinks positively of her work environment, she may talk positively about it to friends and family. Work is a big part of our lives, so it’s natural for it to come up in conversation. An employee who feels she's being treated fairly and that she's valued will reflect that, even when she’s off the clock.

How Negative Employee Performance Hurts

Negative employee performance can hurt businesses at every level. For example:

  • Poor customer service can drive away customers. 
  • A lack of follow-up can lead to missed business opportunities. 
  • Absenteeism can put a strain on your other employees. 
  • Unfocused employees can make expensive mistakes. 

When it comes to negative employee performance, it’s critical to look at whether the employee is coachable and willing to improve. Skills can be taught, and many aspects of being an employee can be taught as well.

Employees may also have understandable reasons for under-performing, such as grief or illness. Showing patience in challenging circumstances enhances employee loyalty, which can lead to improved performance.

Investing in Your Employees

A popular meme shows an underpaid employee underwater, and instead of being given a hand from management, the employee gets a high five and a pizza party. Food is a great motivational tool, but it doesn’t create a high-performing culture.

Since your employees can make or break your business, it makes sense to invest in them. One area to examine is their pay and benefits. Is your business paying a wage that’s comparable to other businesses? Are you able to add or extend benefits to more employees? Being able to take time off when needed and have access to healthcare can help your employees feel more at ease and less stressed.

If there are specific areas where employees are struggling, consider formal training. A class in Microsoft Office or in resolving conflicts with difficult customers could give your employees valuable skills (and a break from the daily grind).

Handling Poor Performance

It’s critical for you or a manager to develop an improvement plan with under-performing employees. Ask the employee about where he thinks he can improve and listen to his feedback.

Work together to come up with an improvement plan. This plan should be in writing and it should be specific. For example, if an employee is making frequent errors on the register, a plan might include one-on-one retraining, teaching the employee how to double-check his work and periodic spot checks.